Tokio Marine ramps up decarbonisation push with new targets

Tokio Marine ramps up decarbonisation push with new targets | Insurance Business Asia

Environmental

Tokio Marine ramps up decarbonisation push with new targets

Initiative aligns with company’s goal of achieving net-zero emissions by 2050

Environmental

By
Roxanne Libatique

Tokio Marine Holdings Inc has introduced new targets to accelerate its efforts toward supporting a decarbonised society.

The insurance giant, which said it considers climate change mitigation a key priority, detailed its strategy for developing insurance products that encourage decarbonisation while reporting progress in client engagement on this front.

The decarbonisation-related insurance offerings cover a range of sectors, including renewable energy, electric vehicles (EVs), and energy storage systems.

These products are designed to support businesses involved in renewable energy projects such as solar and offshore wind power.

Additionally, Tokio Marine provides insurance coverage for EVs and energy storage, helping to mitigate the risks associated with the transition to cleaner energy sources. The company’s insurance also includes warranties for mergers and acquisitions in the renewable energy sector.

Client engagement on climate goals

Tokio Marine Nichido & Fire Insurance Co (TMNF), the company’s primary non-life insurance arm, has been actively engaging with large corporate clients on decarbonisation strategies.

In a move announced in September 2023, TMNF pledged to engage with 200 major companies that contribute to about 90% of the insurer’s emissions linked to insurance policies.

As of fiscal year 2023, TMNF had reached Level 2 engagement with 104 companies, achieving 52% of its target. Level 2 engagement involves working collaboratively with clients to identify decarbonisation challenges and providing solutions, including tailored insurance products to address climate-related risks.

The company aims to achieve Level 2 engagement with more than 160 companies by 2030 as part of its long-term plan to reach net-zero emissions.

Heatstroke insurance demand surges

While Tokio Marine advances its long-term decarbonization initiatives, it is also responding to the immediate effects of climate change, such as rising temperatures in Japan.

In response to the heatwave, Tokio Marine’s subsidiary, in partnership with NTT Docomo, launched a low-cost, short-term insurance product in mid-2023 specifically aimed at addressing heatstroke risks.

Other Japanese insurers have experienced similar increases in demand for such policies. For instance, Sumitomo Life Insurance Co reported more than 100,000 sales of its heatstroke insurance policy by July 2023, a considerable jump from the previous year. Mitsui Sumitomo Insurance Co also noted a rise in heatstroke-related coverage, particularly among younger and older policyholders.

The rise in heatstroke insurance reflects increasing awareness of the dangers posed by extreme heat. In response, Japanese insurers are developing new products and expanding their existing coverage options to better protect individuals against heat-related illnesses.